China's endless moral hazard

Victor Shih of Northwestern University speaks about the ambiguous boundary between public spending and corporate debt.

Right now it looks like no bank is too big or too small to fail in China. With auto bailout systems for banks at every level, it doesn't matter how much a local bank may be underperforming -- the government has got its back.

Associate Professor Victor Shih from Northwestern University in the US spoke at the second Annual Global Recovery Investment Summit that was arranged by AsianInvestor and FinanceAsia in Hong Kong this week to discuss more closely this dilemma and the issue of what he called, China's endless moral hazard.

Shih refers to the situation as a moral hazard because he believes that no matter how much trouble a...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222